national captioning institute, which is responsible for its caption content and accuracy. visit ncicap.org] [captions copyright national cable satellite corp. 2025] >> enforcing meaning into unstable living situations. sen. scott: perhaps the most devastating statistic of all is that homelessness has hit a record high. an 18% increase, 18% increase in justice 12 months. and a 30% increase since covid ended. this raises an important question. why do we continue to confront roadblocks despite massive government investment and support? the hard truth is government interference is perhaps more of the problem than the government resources are the solution. spending trillions of dollars on the housing market is not the answer. today we will hear from leaders and experts about what needs to be done. we are honored to have with us

today erik johnson, the mayor of dallas, texas. go cowboys. a local official who understands the challenges of housing at the community level. we have the chief information officer of the united wholesale mortgage who can speak to the impact of federal housing policies. and also edward glazer, a respected academic from harvard university who brings a much-needed perspective on the economics of housing and renee willis, the interim president and c.e.o. of the national low-income housing coalition. the good news is we have a diverse group of experts who can speak to the issue that impacts all americans in a way that i believe will improve our ability as a committee to get things done, frankly, not even in a bipartisan fashion, in a nonpartisan fashion. this is about american people finding their path to the american dream and not about republicans or democrats scoring points or making points.

let's make a difference together. i look forward to your insights and discussing real, workable solutions to what most americans consider a crisis. we need to take a different approach that embraces efficiency, deregulation and getting the federal government out of the way. there are too many regulations at the federal, state and local levels in my opinion, having worked a at all three levels of government, to actually build homes in the local communities. whether it's restrictive zoning laws, bureaucratic red tape or misguided policies that drive up the cost of construction, policymakers at all levels of government must take a hard look at what's really preventing the housing supply from keeping up with housing demand. that's why my legislation, the road to housing act, seeks to make targeted reforms that will actually work. this legislation would reduce regulatory barriers, streamline the development process and ensure that taxpayer dollars are used most effectively.

i've seen firsthand from local communities that they are best positioned to address their housing challenges. the federal government should not dictate a one-size-fits-all housing program. instead we must empower states and local governments to adopt policies encouraging responsible development and increasing housing supply. let's be clear. housing should not be a partisan issue. can't say that enough. because it's just about people realizing their version of the american dream. plain and simple. that's why i urge my democratic colleagues to work with me and all of our members on the right in our approach to the road to housing act, by working together we can reverse decades of failed housing policies and bring about real change for tens of millions of americans who need it the most. i look forward to today's discussion and working with my

colleagues on both sides of the aisle to advance policies that will restore the american dream of home ownership and put more americans on the path to success. while closing the gap on wealth in this country. thank you and i look forward to hearing from our witnesses and our ranking member. >> thank you, mr. chairman. i appreciate you holding this hearing. i know that you care deeply about addressing the housing crisis and i hope we will be able to work together. sen. warren: to lower housing costs for families. the crisis we face today is massive. we have a nationwide shortage of about five million homes and these shortages drive up rents, they push home ownership out of the reach of millions of families. 40 years ago the cost of a house for a boston public school teacher was about 4 1/2 times their salary. today that same boston public

school teacher would need about 11 times their salary to buy a home. housing feels unaffordable because housing is unaffordable. we do not have enough housing. and nothing gets better if we don't build more housing. so, how do we increase the housing supply in hous -- supply? housing is local but for decades states and towns have fallen further and further behind. the federal government can be a good partner to help boost housing supply and to make the housing market work better for families. fortunately there is no shortage of good and in many cases bipartisan work done by members on this committee that would help get us started. and i just want to mention a few. senator smith has a bill with senator rounds. the rural housing service reform act. it would help protect and expand

affordable housing supply in rural areas. senator warner has a bill with senator crapo, the scaling community lenders act, which with a help fuel more lending and investment in low income and underserved communities. senator cortez masto has a bill, the price act, which would help upgrade and preserve manufactured homes. she also has the home investment partnership's re-authorization and improvement act which would help local communities finance new construction, home repairs and other housing needs. senator van hollen has a bill with senator young, the family stability and opportunity vouchers act, which would give more families with young children access to safe and stable housing. senator reid has a bill with senator haggerty, the homebuyers' privacy protection act, that would protect perspective homebuyers' personal

information from predatory lenders. senator lummis has a bill with senator fetterman, the whole home repairs act, that would help homeowners and small landlords make essential repairs that keep homes safe and livable. senator gallego has a bill, the housing vouchers fairness act, that would help more families in high-growght states afford housing. senator blunt ro chest harris a bill, the re-- senator blunt rochester has a bill that would support state and local governments that want to update their zoning laws to build more affordable housing. senator warnock has a bill, the down payment toward equity act, which would support first-time, first-generation homebuyers. i'm glad to partner with senators warnock, van hollen and kim on my american housing and economic mobility act, which would help build nearly three million new affordable homes and

lower rents across the country by an estimated 10%. there are different approaches we could take to help address the housing crisis. but ideas like these should get us started and i hope we can consider these and other bills as our committee looks forward to passing meaningful housing legislation this year. i just want to close by mentioning the assault on h.u.d. in the past few weeks, h.u.d.'s secretary turner and elon musk's doge have frozen affordable housing development projects across the country. they have also made it easier for landlords to deny people housing because of a disability or how they look. and they have rolled out plans to lay off half of h.u.d.'s workforce. these actions will make it harder, not easier, for families to access housing and they will raise housing costs. if the federal government is going to be a good partner to

local communities to address the housing crisis, we need a well-resourced and well-staffed h.u.d. thank you, mr. chairman. sen. scott: thank you, senator warren. we will now hear from today's witnesses. we'll start with mayor johnson, you are now recognized. for f mr. johnson: thank you, mr. chairman. and distinguished members of this committee for the opportunity to speak to you on the critical issues of homelessness and housing affordability in our country. my name is eric johnson and i have the honor of serving as the 60th mayor of dallas, texas. i was born and raised in dallas. growing up in low-income house hold, my family bounced around between cramped apartments and small rental homes. and i know firsthand what housing insecurity feels like and how important stable housing is for families. it's true that in dallas we've made some noteworthy gains in addressing both homelessness and housing affordability. last year we effectively ended veteran homelessness by ensuring that any veteran who fall into

homelessness is housed in 90 days. this means in dallas, the men and women who served our country are treated with dignity. but i don't want to spend the time so graciously allotted to me by this esteemed committee bragging about what dallas has done right. instead i want to try to help this committee understand what i've learned about both homelessness and housing affordability from serving on the front lines as the mayor of america's ninth largest city. over the past six years, i've come to understand that two major misconceptions stand in the way of real progress. if we don't correct these misconceptions, we will never move the needle on chronic homelessness or housing affordability in our nation's cities. the first misconception is that housing affordability is the primary driver of chronic homelessness. homelessness is a complex issue and affordable housing is a critical component of the solution. however, the overwhelming majority of the chronically homeless are not living on our streets because of housing affordability. they're doing so because they

struggle with serious mental illnesses, drug addiction and psychological and behavioral disorders. chronic homelessness is primarily a public health issue. but we're not addressing it as such. it is not primarily a housing affordability issue and it's not even a public safety issue at its core. although we can and should enforce local laws prohibiting camping in public spaces and in public buildings, we cannot arrest our way out of chronic homelessness. we must shift our focus toward thinking about chronic homelessness more as a public health issue and less as a housing or public safety issue. the second misconception is connected to the fact that many discuss and even shape policy related to housing as though it is not a market, when it in fact is. like in any other market, housing prietions are determined by supply and demand. therefore the most effective way to bring down housing prices is to encourage the private sector to increase home building throughout the united states, but particularly in cities like dallas, where we see

unprecedented demand for our existing housing stock because of our economic growth and success. now, keep in mind, government itself is not an effective housing developer. but what government can do is step aside, cut the red tape and encourage the private sector to build more homes faster. in dallas, we have shown that reducing barriers to home building works. we've cut permitting times, streamlined zoning and worked with private developers to increase housing starts. over the past few years, we've prioritized efficiency and as a result we slashed the median time to issue a residential building permit from 68 days in 2022 to just eight days in 2024. this expedited permitting process has enabled developers to bring newhousing to the market more quickly. helping us to meet the skyrocketing demand for housing in dallas. i strongly believe that the most effective thing congress can do to make housing more affordable for everyday americans is not to create yet another federal

program that pours millions of taxpayer dollars into subsidizing the already robust demand side of the housing equation. what i need right now as the mayor of dallas, the heart of the fastest growing metropolitan area in the united states, is for congress to reframe the narrative around homelessness and housing affordability by correcting the misconceptions that i've just discussed. thank you very much for the opportunity to speak to you and i look forward to doing the very best i can to answer any of your questions. thank you, mr. chairman. sen. scott: thank you. good to see you again, thank you for being here and sharing your knowledge as well. you're next. >> chairman scott, ranking member warren and distinguished members of the committee, thank you for inviting me to appear at today's hearing. my name is lee and i am the chief innovation officer at united wholesale mortgage. it started in 1986 and we have grown to 9,000 team members who come to work every day at our state-of-the-art headquarters in pontiac, michigan. we support over 10,000 independent mortgage brokers

across all 50 states. since 2022 we have been the number one overall mortgage lender in the u.s. we operate exclusively in the wholesale channel which means we don't lend directly to consumers, we serve mortgage brokers at our clients. to give you a sense of our scale, we funded approximately one in 10 mortgages in the united states last year. home ownership remains to be the most significant source of financial stability for american families and united whole sale mortgage as the largest mortgage lender in america takes seriously our responsibility of maximizing the accessibility and availability of financing so more people can achieve the dream of home ownership. while the system to facilitate mortgage financing is functioning today, there are some clear and actionable ways to improve the status quo. but before turning to the solutions, i would like to first highlight three significant headwinds to making home ownership more attainable. interest rates, supply and cost embedded in the mortgage process. first, i will address interest rates. for the past three years, consumers have been facing interest rate sticker shock.

to put this in perspective, there are over $2.5 trillion worth of mortgages at a rate at or above 6% in our country today. and that is most of the loans originated in the past two years. this compares to rates that were between 2% and 5% from 2020 to 2022. second, there are simply not enough houses available at any price to keep up with demand. the short supply in combination with higher rates creates an environment where homeowners stay put in their homes longer than the typical seven to nine years. we call this the lock-in effect. with people locked in their homes and not moving up like they normally would, new homebuyers are frozen out of the market. third and finally, there are opportunities to reduce the costs imbedded in obtaining a mortgage that do not involve lower credit standards or risky underwriting. rather, all it requires is an embrace of technology and data available to market participants today. to address these challenges, congress, fhfa and h.u.d. can act with purpose and urgency to improve mortgage affordability. first, we believe some competition between the two g.s.e.'s is necessary to

increase the responsible flow of credit and achieve greater efficiency and affordability in the mortgage process. policymakers should re-evaluate any rules that prevent the g.s.e.'s from competing against each other, specifically on volume and innovation. one example of a conservatorship policy that's stifled innovation is fhfa's new activities rule it. significantly curtails the g.s.e.'s ability to seek opportunities for innovation and keep up with advances. when the g.s.e.'s compete under the watchful eye of the regulators they can offer better products and policies, often through pilot programs, to attract lenders who ultimately pass these benefits on to borrowers. for lenders like u.w.m., competition means our advances in technology can ultimately be accessed by more americans. secondly, we need to streamline the mortgage process without increasing homeowner, lender or systemic risk. by allowing innovations and technology to replace traditional paper-based prod sess. one such area is title

insurance. some solutions have been introduced to the market. mortgage lenders and the g.s.e.'s must be incentivized to further innovate. another area is appraisals. by increasing virtual appraisals, modern analytics can save consumers money. more competition between the g.s.e.'s could also have the effective incentivizing the credit bureaus to compete. congress should support fhfa and congress can also support fhfa and h.u.d.'s efforts to reduce consumer costs by harnessing the power of innovation to make home ownership more accessible and more affordable to all americans. thank you again for the opportunity to testify today. i look forward to answering your questions and i would like to invite any members of this committee out to our campus in pontiac, michigan, to talk more about how we can continue to help americans achieve the dream of home ownership.

mr. glaeser: thank you. i'm an economist who spent much of the quarter century studying what has gone wrong. i watched as the real price of boston tripled. until the last decade, the cost of housing in cities like atlanta, dallas and houston remained affordable, largely because these sunbelt cities built a lot of homes. but that has changed. the real price of housing doubled in phoenix and rose by 5 5% in atlanta. the median new price $1 635,000 -- $676,000 in phoenix. the critical fact about america's current housing crisis is that it is driven by a lack of supply of new homes. we live in a land of plenty and yet we have manufactured a shortage of basic living space.

economists sort out supply and demand by looking at prices and quantities if. prices are up and building is up, then we know demand is to blame. if prices are up and building is down, then it's a supply problem. as the next exhibit shows, home building across the u.s. collapsed after the global financial crisis and has yet to recover. we are producing fewer single family homes at the start of 2025 than we did at the start of 2021 and 38% less than we did 20 years ago. the next exhibit shows that places in america that are expensive don't build a lot and places that build a lot aren't expensive. there is demand for homes in california and there is demand for homes in texas. but texas builds much more and it remains much more affordable. the question nation of high prices and limited building means that america has a supply problem despite the fact that we lack neither land nor construction capacity. the next exhibit uses the waterren index of local land use and shows prices are higher in places with more local land use regulation. this is a problem because

ordinary americans have to spend too much on housing. the nationwide ratio of home prices to median income has reached 5.6 in 2022, the highest ratio in recorded history. 39% of spending by renter households goes on housing. 56% of californians told a recent poll that they had considered leaving the state because of high housing costs. our country is also less productive because we build too little in our most productive places. nobel laureate and two co-authors find that u.s. labor productivity reached 12.4% higher and consumption would be 12% higher if all u.s. states moved halfway from their current land use regulations to the current texas level. throughout our history, americans have made our country stronger by moving to more productive places. 19th century new englanders left our rocky soil to find better farms in the ohio river valley. 20th century refugees from the dust bowl found a brighter future in california. yet today we see no migration to more productive places because we don't allow building there and because it is too expensive.

the next exhibit shows the relationship between the waterren land use regulation index and the level of upward mobility experienced by poorer children, the places that provide the brightest economic prospects for poor children make it hardest to build. the federal government has long fought for affordability with demand side policies such as the interest reduction and housing vouchers but demand side policies can be counterproductive when the fundamental problem is restricted supply. if homes were abundantly supplied at $250,000 each, then demand side subsidies would primarily benefit the households that get those subsidies but if the number of homes is fixed, then demand side subsidies just push up prices. if there are a thousand homes in a neighborhood and there are buyers willing to pay $500,000 for a home, providing them with a tax credit just pushes the price to $550,000. so what could work? we could reconfigure existing supply side policies such as the low income housing tax credit. but there is a lot of work to do. one recent study found that the average cost to build a low-income unit in california was $708,000. a better alternative may be to

encourage states and localities to permit more private construction but here's the rub. america's tradition of federalism is strong and we should never want washington to micromanage local zoning codes. an alternative that respects state and local sovereignty is to use existing federal spending to encourage more construction. we could tie a state's eligibility for discretionary federal infrastructure grants to building newhousing in its most productive counties. transportation-related grants are natural because the benefits of transportation spending are tied to the number of people who are able to live nearby. moreover, our high housing cost problem is closely linked to our high infrastructure cost problem so it's natural for transportation and housing committees to work together. we can take the most productive large counties in the u.s., 119 counties collectively produce more than 1/2 of america's national income, and they're spread throughout our country. from richmond county, south carolina, to middle sex county, massachusetts. we could allocate homes to those accounts and if states have those accounts and they build enough, they get priorities on grants. if they have those counties and don't build a lot, they don't get priority. if they don't have those

counties, it doesn't impact them at all. it's just one idea. my hope is this will -- we want local creativity but we also want a nation that makes space for outsiders and our nation is not currently doing that. i want to end again by thanking the committee for taking up thising to inand forgiving me the chance to -- this topic and for giving me the chance to speak. sen. scott: thank you. ms. willis: chair scott, ranking member warren and members of the committee on banking, housing and urban affairs, it is an honor to testify before you today. the nation is experiencing a pervasive and growing housing affordable housing crisis, impacting rural, urban, suburban and tribal communities alike. most renters, particularly those with the lowest incomes, are struggling to keep a roof over their heads, and a record number of people are experiencing homelessness. the national low-income housing coalition's latest research, which will be published tomorrow, has found a national shortage of 7.1 million rental homes, affordable and available

to extremely low-income households. this shortage is a structural feature of our country's housing system. impacting every state and congressional district in the country. despite the clear, urgent need for additional resources, congress only provides enough housing assistance to serve one in four eligible households. without affordable homes, three out of every four extremely low income households spend over half of their income on rent, leaving them without the resources they need to put food on the table or otherwise to make ends meet. these households are often a single missed paycheck or unexpected expense away from facing eviction and in worst cases, homelessness. to fully address america's affordable housing and homelessness crisis, congress must bridge the gap between incomes and housing costs through universal rental assistance, build and preserve

rental homes, affordable to people with the lowest incomes. prevent evictions and home psness by stabilizing families during a crisis, and strengthen and enforce renter protections to address the power imbalance that tilts heavily in favor of landlords. in 2025, congress can and should advance bipartisan housing package to help make meaningful strides towards this goal. we urge you to act quickly, to enact meaningful solutions, despite the challenging political times. as we discuss the importance of housing solutions, i must also address an immediate threat facing h.u.d. and by extension, the communities people -- the communities and people h.u.d. serves. elon musk and the department of government efficiency, doge, proposed to fire half of h.u.d.'s current workforce. without adequate staff to administer and oversee these funds, states and communities

will face new barriers to accessing the critical federal resources they need to pay the rent, build affordable housing, address homelessness, recover from disasters, revitalize distressed communities, promote home ownershipped, enforce fair housing laws and more. rather than improving efficiency, such drastic staffing cuts at h.u.d. will cause significant harmful and costly delays and will worsen america's affordable housing and homelessness crisis. as well as its significant disaster recovery needs. delays in accessing federal resources will slow down affordable housing construction and drive up development costs, slow recovery after disasters, and cause organizations that rely on federal funding like homeless services agencies to limit services or close their doors altogether. we are also deeply concerned about doge's efforts to unilaterally withhold funding approved by congress and

terminate contracts. funding for homelessness, fair housing, technical assistance and capacity building have been wrongly withheld or canceled. unless this funding is released soon, it could cause irreparable harm. victims of discrimination will have no way to enforce their rights under the law, and shelters may have no choice but to close their doors and turn unhoused people onto the streets. i look forward to opportunities to work together to protect and expand federal housing investments and protect the federal agency staff necessary to administer and oversee these funds. to help address the affordable housing needs of communities all across this nation. thank you. sen. scott: thank you very much, madam chairman. we'll start our questions with senator kennedy. i'll defer to senator kennedy and then to ranking member warren. senator kennedy, the floor is yours, sir.

sen. kennedy: thank you all for being here. professor glaeser, you're head of the department of economics at harvard? no longer. but you've taught there since 1992. sen. scott: i think you need to turn your microphone on. sen. kennedy: did you your ph.d. work at chicago? mr. glaeser: that's correct, sir. karoline: great school. you publish about five articles a year. mr. glaeser: i don't know. i've published a few. sen. kennedy: i appreciated your testimony because you not only talked about the problem, but you talked about possible solutions. no disrespect to anybody, but, you know, revamping our appraisal process or title insurance or talking about power imbalances is not going to get

homes built. not a free enterprise country. our probably is supply, isn't it? mr. glaeser: yes, sir. ken and the main reason we have -- sen. kennedy: and the main reason we have a problem with supply is because of land use regulation, isn't it? mr. glaeser: i've been saying that for 25 years, senator, yes. i agree with that very strongly. sen. kennedy: and land use, zoning, some would call it, is within the job description of, to some extent the state, but mostly local government, is that right? mr. glaeser: that's correct, sir. sen. kennedy: congress has a history, it seems to me, you can disagree certainly if you do, of just throwing money at the problem. and trying to tell local governments how to get more houses built and local government takes the money and pushes back.

because politicians at the local level, they like to live and eat indoors too and they like to get re-elected and they don't want to make anybody upset by changing land use regulation in a way to encourage more housing. would that be a fair assessment? my words, though, not yours. mr. glaeser: i will not disagree with any of those words, senator. sen. kennedy: there's a plan that's been talked about in canada. and what the canadians, they're talking about it, it hasn't been implemented, but the proponent of the plan, i've talked with senator warren about this, has said, look, we need to incent local government to increase housing starts. but we need to use a carrot and

a stick. what if america had a law, congress passed a statute that said, look, we don't care how you do it, states, but you need to increase your housing starts by 3ers had, 4 -- 3%, 4%, 5% a year. do it however you want to do it. if you do that, we will give you extra federal money. if you don't do that, we will take federal money away from you until you start doing it. would that work? mr. glaeser: if you're willing to champion such legislation, senator, i'm willing to be behind you. i think there are challenges with that in the u.s. the difficulties of taking away spending that was already expected may be particularly hard. it may be hard to do with discretionary grants than with spending that's targeted. i also think it needs to be targeted not to the states' level of production, but to production in the most productive parts of the state. right? we don't want california to meet

its requirements by building in areas that are very far away from los angeles or san francisco and, you know, and so forth. but i think basically something that creates carrots and ideally sticks as well that tries to encourage states to do the right thing and from my perks the battleground of affordable housing is in places like the california state legislature and i would love those legislators who want to do the right thing, who want to make california a state for outsiders to be able to i sarks look, the federal government is pushing us in this direction too. can we just not lose our spending for x? can we do this? and i think that would be very powerful in the hands of -- sen. kennedy: who would be best to decide the most productive areas to incen, it housing? mr. glaeser: i would use bureau of economic analysis numbers of output per capita. but this can be debated. lots of people -- i would not hand it over to an agency, though. i would put it directly in the legislation. sen. kennedy: you think our problem in america with housing is caused by a power imbalance? mr. glaeser: i'm not sure i know what that means.

sen. kennedy: me neither. me neither. thank you. mr. glaeser: thank you, senator. sen. scott: thank you, sir. ranking member. sen. warren: thank you, mr. chairman. so i think we all agree here. we need to build more housing. housing for seniors, housing for students, housing for veterans. for renters. for first-time homebuyers. for families in rural areas, for families in cities. housing for pretty much everyone who isn't already rich and doesn't already own a home. and there are a lot of drivers behind the housing shortage. it's the reason why we need to use a lot of different tools i think to expand how we approach housing. factors driving the housing shortage it seems to me include outdated building codes, local land use restrictions that prevent newhousing from being built. for example, according to one estimate, it's illegal to build apartments, town homes or anything but single family detached homes on 3/4 of the

residential land in cities and suburbs across america. so, dr. glaeser, just help us understand it a little bit more granular level. walk us through the problem about local restrictions and how they -- like exclusionary users owning or building codes, and how they drive up the cost of housing. mr. glaeser: so there are, you know, there are a thousand different ways to say no. and in greater boston, which you know as well as i do, i have spent a lot of time studying it in its different forms, and it starts by making it hard to manufacture at scale. so it starts by requiring that you get sort of these tiny projects instead of the large scale building that builders like the levets were doing after world war ii, when you had mass production of ordinary homes that made things affordable. you get smaller projects. then you get smaller projects that take two years to get approved. i mean, i'm amazed by, like, you

know, most of our people are talking years and the rules become so specific for particular towns, for give me for being massachusetts-oriented. i know one building who will not build outside of lexington, mass. he will not cross. this is a small town. just in general, just the difficulty of moving anything. now, in massachusetts we do have a tradition of a state override. we have massachusetts chapter 40-b which allows an override for certain types of affordable housing projects. i am the last thing i would say is that 40-b is the right model for other states but it is a model that's been helpful in massachusetts. so this tradition of sort of fighting back and forth between state and local is a really important thing. sen. warren: i think that's a really important thing to focus on. where the problem lies. look, our job is not to tell local governments what to do. but we do have a responsibility to be a good partner to communities that actually want to build more housing and more housing that we need. i have a bill right now, it's

senators warnock and van hollen and kim, and it creates competitive grant programs. it's the carrot end of the spectrum and says that if a community will lower the cost of housing and actually produce more housing, then we'll put money on the table for other costs that come along with that. they can use it to build new elementary schools or new roads you may need or a new sewage plant you may need, all of it's supporting this housing. with senator kennedy, what we're working on right now is carrots and sticks if that's what's needed here. but let me just ask. i think that senator kennedy was asking about this, do you think that's a way to expanned supply? -- expand supply? mr. glaeser: i think that policies that lean -- that nudge states and localities towards permitting more housing, to allowing the genius of american industry to get to work and build homes for ordinary

americans, i think those are very good policies for you to consider. sen. warren: let me let you get in this as well, ms. willis. do you i think this is a way to be able to expand supply? ms. willis: absolutely. looking at your american housing and economic mobility act, absolutely. because you talk about the carrots and there's definitely that -- in that bill because you're incentivizing, there's an opportunity to incentivize and encourage better zoning practices. there's also a competitive program that can really create a race to the top. zoning reform is best handled at the state and local levels. but i think in your bill there is that incentive, that carrot that you speak of, to incentivize innovation at the local and state levels. sen. warren: i'm running out of time but can i just ask you, you're an expert in this area. is this something that likely could help us produce more

supply? mr. jelenic: ranking member warren, thank you. we are focused mostly on the mortgage process. sen. warren: i understand. mr. jelenic: yes. there clearly is a supply issue in the country right now. sen. warren: good. just want to say, this is not about the federal government imposing a one-size-fits-all and that housing in louisiana has to look like housing in massachusetts. or be built in the same ways. but it really is an incentive to get local governments to solve the problem they face because let's face it, they've had 40 years and the problem has just gotten worse and worse and worse. so thank you, mr. chairman. look forward to working with you on this. sen. scott: this is an exciting time for us to have a nonpartisan conversation about solving needs in our country. i wish we would do this more often around every committee in the senate, frankly, and the congress. for those of you perhaps not aware, i spent 13 years, six months, seven days and 12 hours on local county council. [laughter]

sen. warren: but who is counting. sen. scott: exactly. i was not excited to leave at all. i really enjoyed my time. there. but i'll say without question that the issue of housing is very much a local issue and frankly, while the state legislature can do some good, it's those communities who really have building caps that distorts the market in extraordinary ways. the way that they use their zoning laws and density requirements is in fact what has exacerbated the problem from california to new york and beyond. how does that happen? well, your local community decides they don't want anybody else moving in. not everyone wants a wall built but we're building this virtual wall outside of certain communities by saying, we're not going to allow for any high density construction in these areas and you add that on top of the construction costs and 7% interest rates, you have destroyed the local housing

market. mayor, you've done a fabulous job in texas, from crime to improving safety, to focusing on homelessness and reducing the amount of time it takes to get things done on every topic, it seems like, frankly. i really appreciate your service to your community in many ways, to texas and beyond. can you talk about how you would address the issue from a zoning perspective, number one. number two, compound question here, is the housing -- the homelessness crisis is something we should all be passionate about. 18% increase with record number -- record dollars being spent through h.u.d. to address homelessness and yet the problem gets worse. it's almost as if the more money we put out there, the worse the problem has got. i'm sure someone will rebeung me for that statement, but -- rebuke me for that statement, but the truth of the matter is we seem to be dealing with something more complicated than here's a couple more dollars, let's solve the problem. mr. johnson: i appreciate the question.

and i'll do my best to tell you in all cases, my perspective as the leader of a city on the policy side and the political side as opposed to the bureaucratic side. but we're talking about something that's largely a bureaucratic issue. so there's just a lot of issues related to, specifically you asked about zoning. i would also throw in with that permitting. this is process. this is about process and this is about, in many cases, local governments not being sufficiently focused or perhaps incentivized to focus on their process and making it easier to do business with the city. frankly, there are entities that exist in the world in the united states in particular that know how to build houses, know where houses need to be built, and can do so profitably, but are being

ham strung by local governments and how difficult it can be to navigate their process and how long it can take to bring a project to fruition. so we've had success. but it's not for no reason. i've had to really lean in over the past six years with the bureaucracy, our bureaucracy's headed by a city manager in dallas. but i've had to really impart upon them just how important it is that we prioritize getting down these permit wait times. this doesn't just happen on its own. departments had to be consolidated. staff had to be moved around. things had to be done. you had to reconfigure how we went about serving the developer community. having pre-meetings with folks about their projects and just we had to be very creative about how we got projects done more quickly. and so that takes a concerted

effort and that's a process thing. i'm talking to the united states senate right now and so the question i'm thinking of, i want to not address here is what can you do to help with that? i mean, i think we need some form of change in conversation around this topic of housing because i think we get confused, frankly, and think that housing somehow is something that we at the local level can just determine the price of and that there's nothing that, you know -- housing is like everything else. supply and demand determines the price, but we don't act that way. and i think we could use some help with changing that narrative around that. as far as homeslessness is concerned, i would say similarly we have a narrative problem. in the love ways i've had to push back on the idea that the folks that you see sleeping on our streets are there because of the high median housing price in dallas. and it's really not about that.

the unhoused you see on our streets are there for other reasons that i outlined before. in addition to thinking about carrots and sticks and the things that congress can do financially, we could use some help with changing the narrative around these topics to understand what the real root causes are. sen. scott: extending my self the 54 seconds you did not use in your opening statement, i'm going to question mr. glaeser to. me the housing issue we have of affordability is in fact, the more you suppress housing construction because of your zoning laws, the higher your prices are going to go in the communities. we're talking about a manufactured crisis. please continue. for my -- mr. glaeser: i agree with that pretty strongly. so thank you for taking this up. i think this is exactly right. america is full of land. right? we are an abundantly rich country. this is not necessary. we did this to ourselves. we did this to ourselves by stopping the natural genius of american builders by restraining

them over and over again. by making it impossible to figure out new ways to build. just look at what's happened to productivity in the construction industry. every other industry, right, it soars. construction has stagnated. it's stagnated in part because our projects are tiny, which means that our firms are tiny, and firms that have four people, six people, don't have research and development departments. there was a time when construction was just as dynamic as every other industry, but because of this web of local land use regulations, it is no longer so. sen. scott: thank you, sir. senator kim is next. sen. kim: thank you, chairman. thank you to the four of you for coming on out. mayor johnson, i wanted to start with you. between fiscal year 2023 and 2024, your city received more than $31 million there federal funding through four grant programs. one of them was the home investment partnership. i'm not too sure how much you're aware of how all of that was used but i wanted to see whether or not you were able to speak to whether or not that was helpful and important for your city in

terms of understanding how to address the issue of household -- building of homes. so over to you. mr. johnson: so i can't speak specifically to exactly what those funds went to in terms of directly contributing to the number of housing starts that are atrabtable to that over that period of time but i will say is this. in a more general sense. i think there's a whole long list of federal housing programs that we've used over the years, mostly focused on the construction of multifamily and rental housing units that i think we've sort of learned over the years, that they're just not that efficient at delivering at the end of the day the number of housing units that we need to move the needle on affordability. so i don't want to say these

programs don't work, i want to say that it depends on how you define working. i think when we look at, you know, creating housing year over year in dallas, using some of these programs in the 3,000, 4,000-unit type of range, when you have the need for maybe 50,000, 60,000 or so units, it's just not enough. and so i think what i want to emphasize to the committee, and i definitely appreciate the opportunity to be here to speak to this, is it's not about the fact that these existing programs are unable to create a housing start. it's about the fact that they will never be as effective at creating the housing at scale that we need to actually move affordability in the right direction, then actually impacting the supply side. sen. kim: i agree with you. i think there's unanimity in this room that we need to make

sure we're sending those signals and trying to address the supply side. what i'm trying to think through is how do we make sure that as we spurred building and development that we're spurring diversity of the types of homes that are being built? because we struggled with that here in new jersey, my home state, where a lot of the incentives for building is to build very large houses and very expensive condos and not as much on the affordability side. so i was just trying to get a sense from you, what are the tools that can help ensure that affordable homes are being built, not just, you know, some of the most expensive stock. mr. johnson: right. well, again, i think this is where i have a philosophical difference with some folks about whether or not you can just set out to build an affordable home without getting involved in the market in ways that are counterproductive. i do think that the affordability of homes is related to the supply and demand issue. and what i would say in a city like dallas, which is almost 400

square miles, which has some more vacant land in it to build on than most american cities have available to it, is that we are not utilizing to the full extent that we can just building -- let's start with single family, we could be building a lot more single family that would drive down the cost of housing for everyone. without setting out from the outset and trying to artificially cap the cost of it and saying this will only be -- we'll only let charge someone x amount of dollars to pay for a house like this, i don't think that those types of programs work long-term. at some point the house turns over and it stops being an aided forrable house, even if you set out from the outset for it to be one. the only thing that works long-term, i truly believe at this point, having lived this now, is to have a build, baby, build attitude toward housing in your town. we're being inundated by californians and chicagoans in

dallas, people who are coming because we're being economically successful and it looks like a bargain to them, all of our housing stock. but it's driving up the median cost for people who are not used to paying that. and i think that the approach we need to take is one that is more market-based and that unleashes the potential of the private sector to build more on our unused land which there's a lot of. sen. kim: great. thank you, mayor. i yield back. sen. scott: thank you, sir. next will be senator rounds. sen. rounds: thank you, mr. chairman. first of all, thank you to all of you for coming and visiting with us today. i think the one thing that we hear time and again regardless of if you're a large community or a small community, is the need for appropriate housing. and in many cases it can take a different form or a different priority regardless -- depending upon whether you're in a small community or large community. but at the federal level, we need to be able to look at multiple types of programs that might be available to assist in

incentivizing the development of new housing. housing eventually wears out and you need to be looking toward the future. i'd like to begin with ms. willis. first of all, thank you for the work to help the people with the lowest incomes have the opportunity for quality and affordable homes in our communities. the last several years i focused on bipartisan housing work addressing a range of topics, including streamlining of the environmental review process, modifying homelessness prevention programs, and increasing access to affordable housing in rural areas. for the past two congresses, senator smith and i have introduced the rural housing service reform act, to preserve affordable housing units in rural communities across the country, and make much-needed updates to the usda's rural housing service. my question for you is, with your work with the national low income housing coalition, how could legislation like the rural housing service reform act make a difference in rural communities and their ability to finance affordable housing?

ms. willis: thank you for the question, senator. it is extremely important to ensure that we have affordable housing in rural communities. you know, we talked a bit today about suburban and urban communities and tribal communities as well. but it is important to make sure that we focus on urban communities. we know that some of the challenges that are faced in rural communities are severe, in terms of the building of affordable housing. sometimes it's much harder to build in rural communities, sometimes the wages are, for the people in rural communities are lower. and what we have is really when we talk about an affordable housing crisis, you know, nationwide one out of four people who are eligible for affordable housing get affordable housing or rental assistance of some kind. another way of saying that is

three out of four don't. and so i think in terms of when we're looking at the demand side, really it's making sure that the federal government -- making sure that the federal government invests and have resources for communities, including rural communities, to make sure that they also have -- that the housing -- that it's deeply targeted. if we're talking about building affordable housing, we're talking about ensuring that if a builder is building in a rural community, that they're using usda funds or they're using low income housing tax credits. but maybe even pairing that with home dollars or with the housing trust fund dollars. >> once again, you have fewer contractors and the contractors that are there may build fewer

homes as well in those rural areas. just curious, who are going to be the individuals hit hardest by the expiring usda mortgages? sen. rounds: and what could that mean for available workforce housing? it sounds like a weird offset but literally as these mortgages expire, things happen to those programs. can you talk a little bit about that? ms. willis: yeah, they do. and so what's happening is that as the usda mortgages are expiring, also a lot of times they're paired with subsidies so we want to make sure that the families and individuals who are living in the homes or, you know, where the mortgages are expiring, that they can continue to use those subsidies. so it's really kind of decoupling. sen. rounds: need to be done. ms. willis: absolutely. to make sure that people can stay housed because it's important, these are mortgages after 20, 30 years, where we want to be able to keep them in the housing stock. because if not, landlords can

raise the rents, can take them out of the stock -- sen. rounds: prices them out of it. thank you. dr. glaeser, just a real quick thought. c.b.g.'s are really important and we use that in a lot of cases to determine infrastructure opportunities? small and rural communities -- opportunities in small and rural communities. one challenge is in order to do a lot of those types of things, you have to be able to identify the environmental review process of, but also the davis-bacon prevailing wage requirements. i remember correctly utilizing a $2,000 cdbg in a local community and a project that would require the following davis-bacon requirements. that includes prevailing wage compliance, weekly certified payroll reporting, onsite labor interviews, contractor documentation, and administrative oversight. i guess my question very quickly is, wouldn't it cost more than 2dz,000 inned a -- $2,000 inned a member of costs just to complete the davis-bacon reporting alone?

... >> that sounds like a lot of work. while most regulations are local, i'm onboard for reduce the federal regulatory burden as well. sen. rounds: thank you, mr. chairman. caller: chair scott: thank you, senator rounds. >> let me start by saying is i appreciate the line of questioning my friend and colleague, senator rounds from south dakota was offering on our bill. mr. chair i would say i heard you say earlier housing should be a nonpartisan issue. i appreciate that. the bill that senator round and i have been working on with regards to rural housing completely fits that mold. it is not a bill that is pushing any partisan interest. it is a bill that's focused on protecting and preserving affordable housing that is --

without which in rural communities people won't have a place to live. i'm going to following on senator rowntdz' questions, ms. wilson list, if i could. forgive me if i'm repeating. who are the folks that are living in these rural housing service homes? who are we making sure have a roof over their heads and safe place to call home with this program? ms. willis: absolutely. thank you, senator. we are talking about individuals and families who are -- earn 30% a.m.i., or less. or at the poverty line. so that's who we are talking about. these are people who need stable, affordable homes. sen. smith: some are working families? many are already working, they are working in low-wage jobs or elders, right? ms. willis: absolutely. that's what we are seeing. a lot of people we are talking about are people in the workforce. as you mentioned with low-paying jobs. we are also talking -- this is

maybe the third, we are talking about e.l.i., extremely low-income individuals, we are talking about, again, 30% or less a.m.i. we are talking about 30% of then the workforce. maybe another third are our seniors. and another third students or maybe people with disabilities, and also single caregivers. sen. smith: that's important. a lot of times we don't think about who exactly we are making sure have a safe place to call home with this effort. could you just comment briefly on how important it is to -- we talk about adding affordable place force people to live, housing supply problem. i think we don't talk often enough about how we need to preserve the housing that we have so that it doesn't go away exacerbating the challenges that we have. ms. willis: that's right. that would certain exasperate

the challenge. in terms of with -- we are talking about rural communities and these expiring usda mortgages. we want to be able to keep our housing stock affordable to people at the lowest incomes. and i know that your bill, the rural housing services reform act, did really allow households to continue to receive rental assistance, even when those property mortgages mature. that's important. that's about the preservation of housing. that's why a bill like the rural housing services -- service reform act is critical to these communities. sen. smith: i appreciate that. dr. glaeser, i wanted to talk with you a bit about the challenges that we have in helping to increase the supply of housing. i think this is another place where democrats and republicans agree that one -- i think ranking member warren made this point in her opening comments that if you have an imbalance

between demand and intlie, prices are going up. that's going to create the problems that we have here. i'm very proud my hometown of minneapolis has tackled some of the zoning reforms that are necessary to make it easier to build housing, all different kinds of housing to address the challenges that we have. could you just talk a little bit about how you see this -- how you see this issue and what we should be paying attention to? maybe just a bit on how we can innovate and the way we build housing. dr. glaeser: that's a great question. i think i want to use this opportunity to say a word for modular housing. in fact, the -- we have modular housing has lots of capacity to be attractive. it can be differentiated. we can do lots of great things with t we can do it cheaply. economists since adam smith have known that mass production is a critical path towards afor thibility. yet we make it extraordinarily

difficult to produce mass-produced housing. both because of local zoning rules, and because of h.u.d. regulations. both are at play. the chairman of the illinois housing authority is working to make sure public housing in the city of chicago is built using modular housing. i think that's exciting. i would love to see a state that decided to champion statewide zoning so if you have 1,000 square foot hut, you can put the following four models down. enable scale economies in housing. getting back to senator kim's question about housing for poor people, modular housing provides an amazingly good way of providing starter homes and easy to buy things for people who are not of extravagant needs. sen. smith: our public housing authority in minneapolis has been using modular housing to build scattered side housing in neighborhoods thanks to the new zoning laws that are less expensive, high quality, the construction can be completed in

roughly 75% of the time, which also helps to reduce cost. thank you. >> on behalf of the chairman, senator ricketts. sen. ricketts: i want to thank chairman scott and ranking member warren for having this important hearing today because i think we all recognize the housing shortage in our country is something that is creating problems in all of our communities across the state. across this country. my state of nebraska it's certainly one of the things we talked about rural housing. that's one of the things that we worked on when i was governor of nebraska. and success in coming up with programs to do it. we heard the stories, maybe some of you have heard in your states, senator rounds in south dakota, where we'll have somebody in a small town be offered a job to move to that small town, and they come and can't find a house that's suitable. they turn the job offer down. that is a big hamper to our rural communities growing.

to cut through the red tape, come up with solutions is one of the things i think is important for us to look at. in nebraska we created a rural workforce housing bill which provides $7 million to start with that was available for communities to apply for this grant. and then the way most communities abuse it was it create add revolving fund so developers would be able to get a low-interest loan to come to a rural community and build houses that would be available for that community, and repay that loan so it could go back to the community and be loaned out to the next developer down the line. as i said this was tremendously successful. to your point, dr. glaeser, one of the things that it's allowed is developers can make more money in our bigger cities, but wouldn't want to come to a community because it was too expensive, they would actually be able to find it would be economically viable, and build say 12 homes at once to be able

to get more toward that mass scale and bring down the cost of homes. for example n. central city example in central city a home was built on 287 square feet on the market for $209,000. very affordable to get people into those homes so people could take the jobs in rural communities. talked to mater of rolston, nebraska. they are using our middle income housing fund to be able to build 120-unit apartment complex. same kind of idea. grant programs, refundable, revolving funds. we also used arpa dollars to help to do this. but they had to be one-time used. the problem with the federal dollars they were too restrictive. we couldn't use them the same way. it's a one-time shot which was nice, but it's not creating long lasting value. dr. glaeser, waints to talk to you about some of your research on some things. we are talking about creating

more supply. first of all the university of chicago, great school. i'm an alum. great job getting your ph.d. there. you talked about the zoning. how that is impacting the cost because we are restricting what the land can be used for. studies have shown up to 24% of the cost of a new home could be a zoning requirement. what about some of the other things? the ranking member mentioned for example, building permits. or what about the availability of finding people who can do the job in the first place? shortage of people in the trades. have you done research or seen any research that talks about those sorts of problems and what we might be able to do to address them? dr. glaeser: great question. let me differentiate between the two ideas. permits are local government issue. they are really important. time to permit is really important. i think the sort of nudging against local legislation that we have been discussing would be helpful with those as well f we put in expectation that states

are going to have to build in their moss productive counties to have access to certain correction the gentlelady's time has expired spending, those local counties will have to figure out how to get the permitting faster. they have to move themselves down from seven years. the workforce is different. i think that there is a role at the particularly the state and local level, i would be opened for a federal program if it were well constructed, to do more vocational training for lots of places in the u.s. in many cases sort of smart vocational training that wraps around existing education, provides exciting option, but again i'd like to see that legislation in place before i endorse it. i would like to know how much money and see a valuation of the programs. part of the beauty of vocational training you can pay for performance. don't you have to pay for a person unless they learn how to be a plumber or programmer. there is a question whether or not something about the global financial crisis permanently broke the construction industry. don't believe that. it is true we are down about 200,000 people as a whole. but we are up 100,000 in

remodeling. in some sense what excessive regulation has done we changed us from being a nation of builders to being a nation of remodelers. the permit process is easy for that. in the cities that build like for example dallas, texas, they are right back where they were before the global financial crisis. i think it is possible to get the people back. as a strategy to think about holistic human capital strategy, thinking more vocation training, that's worth doing. sen. ricketts: yield back. >> senator reed. sen. reed: thank you for your testimony. miss willis, back in 2008 i represented create the housing trust fund. which is designed as you know to expand housing for people who can desperate looking for housing. why do you think today the

housing trust fund is necessary? how does it help low-income americans? ms. willis: thank you for the question and also thank you for your leadership in creating the national housing trust fund. the national housing trust fund is a -- it's incredibly important because it's one of the only federal investments that targets, goes deep in terms of its target, to target extremely low-income households. that's households that pay -- at 30% a.m.i. or poverty line. it's extremely important because without that it's very difficult, can be very difficult to create affordable housing for that population. but the housing trust fund targets deeply. affordable housing providers and developers are able to build affordable housing using those funds. that go to their states. it's critically important to

have that level of deepness, if you will, to really target the households that need it. sen. reed: as you probably know we have put in legislation that would expand the resources of the trust fund to reach, wheep, three million affordable homes. again everyone on the table has said demand is one of the key constraints. this would really accelerate demand. i hope we can can make progress on that. there's another program that i think is very useful. i'm very proud to have joined senator bricks, my colleague from alabama, to introduce the helping more families save act. essentially that's the family self-sufficiency program. i have seen the results myself where meeting families who because of this program they can put money away, save it up, and

eventually move out and move up. we hope that we can get this passed this year. have you seen evidence of that program and how well it works? ms. willis: absolutely. we certainly do support and have supported the helping more families save act. and again thank you for your leadership on that as well. because it is important for -- it essentially helps renters living in h.u.d. assisted housing to save more of their hard-earned income to boost their financial stability. so we have seen it help countless families across the country. but it really just helps families to save more rather than paying those higher rents. they can put the extra payments into an escrow account that they can use for mobility or to invest in their future.

sen. reed: thank you very much. dr. glaeser, senator leum us and i have -- lummis and i have another piece of legislation. the property improvement manufactured homes modernization act. it with would help us -- families access financing for manufactured housing. could you just generally give us an idea about how manufactured housing and aa.d. use have affordability. dr. glaeser: yes, a.d.u.'s are one way which communities are adverse to large-scale projects can still dense phi -- densify. i wish we did more than that, but a.d.u.'s are a potential aid and manufacturing housing is just a really inexpensive way to add an a.d.u. to your property. i think policies that lean in towards modulars which manufactured housing are helpful on this precisely because

a.d.u.'s are the one policy that can get through in some of our most hostile environments. sen. reed: thank you very much. thank you all very much. thank you, mr. chairman. chair scott: senator reed thank you for being a good example of nonpartisan approach with senator brit on impacting everyday americans. not with me yet. senator reed: if you want something done you'll find a very tal dwrented woman. we have one right here. chair scott: senator brit. senator brit: i am appreciative to snard reed for his willingness to akle these tough issues -- senator reed for his willingness to tackle these issues and i thank him for his leadership. thank you for being here. this is certainly an important topic. i am particularly looking forward to hearing more about this as the chair of the housing subcommittee. when i tackled this issue first off getting here, it's clearly an issue of supply and demand.

it also has -- it encumbers a lot more than that. when we looked at regulations knowing about 24% 25% of home costs is attributed to regulation. you think what is necessary and overburdensome. when you find out that americans are no longer buying their first home, that piece of the american dream in their late 20's but late 30's or early 40's if then, how do we make this more obtainable for every american? there is a number of approaches, senator reed mentioned the one we had of government assistant programs that will people actually achieve upward mobility. that will help them stand on their own two feet and be able to live their version of the american dream which is so critically important. but there are other things that we have been doing that we feel can claw back on some of this stuff. environmental regulations under nepa have directly stifled housing supply. when we look at alabama, we have

a great example, i loved hearing what senator ricketts was saying of things they were doing in nebraska. in alabama we have a great example through our fortified roof program. it incentivizing strong home building and it's able to do that -- encouraging people to build homes that will withstand storms without exposing or imposing excessive environmental standards in the process. it has been a win-win and has been wildly successful. there is certainly a way to do both and there is a balance that need to be achieved. mr. glaeser, can you speak to the impact of erroneous environmental and land use regulations and the ability to build homes to meet those demands? dr. glaeser: thank you, senator. thank you for your leadership on this topic. the -- it is an odd irony that oven environmental regulations are counterproductive environmentally. about 15 years ago i wrote a paper with california environmental economist matthew

kahn currently at the university of southern california which tried to measure the carbon emissions associated with building in different parts of the country. we did this normalizing for family size, normalizing for income. we found unsurprisingly that by far the lowest carbon emission parts of the country naturally were coastal california. nothing to do with the regulation. it's the weather. just to be clear. it's januaries that don't require you to heat like crazy and july that is don't require you to air condition. if you cared about reducing america's carbon emission, you should be saying let's build baby build on the california -- in san francisco bay. let's add in as much housing as we possibly can. yet california housing partially because of the famous friends of mammoth caves which requires a significant environmental review locally for any california project, they face the most onerous environmental regulations. the effect of that is moving build interesting place where it is good for the environment to being places where it is less good to the environment. you see that happen over and over again.

partially it's a mistake that regulators make they think they are stopping the building. it doesn't stop the building. it just moves it someplace else. it moves it to a place that's worse for the environment. senator britt: i have a couple more followups. i would love to submit for the record. twient dig down on that. short on time. mayor johnson, you heard you say to chair scott, talked a little about the local challenges that occur. i am a big believer the best thing the federal government can do in most suasion is just get out of the way. as the daughter of two small business owners i saw that firsthand. i think local leaders know best. they are boots on the ground. and serve the people they serve. can you talk briefly how we enable and equip our state and local leaders to meet the unique challenges their communities face or what we can do better in that regard? mr. johnson: i appreciate that

question. it's interesting. we look to washington for a couple things at the local level. one, you all figured out it's money. we are always looking for money from washington. the other thing is leadership. and thought leadership. sometimes big so close to the people it's good. you know exactly what's going on. but it can be noisy. sometimes the folks who look further away can look at a problem and see it nationally. if you don't look at this housing issue nationally, you won't understand what's really going on. at the city level we are competing with our other cities for people, institutional investment. we want corporate relocations, we want jobs, we want higher education institutions. we are competing for those things. as a mayor my job is to make dallas as awesome as it can be. make the quality of life as high as it can be. the result of that when aim

successful is -- when i'm successful is pressure on my housing market because we are not building enough houses, new ones, to add to the housing stock fast enough that new folks are just adding pressure to the market in the form of more demand in terms of people and what they are willing to pay for it. they are more well compensated. they are coming from the coast. our housing market looks like a bargain to them. what we need from -- i'm saying this over and over again because i was very honored to be asked to be here today, we need the understanding of congress that this is a problem that has to be attacked nationally because we are just pushing the issue around. we really do need to have a build, baby, build approach to housing. in addition to the leadership that we are looking for from our friends here in washington, it's not always about coming and asking for money per se in the

form of a new program. there are ways that -- above my pay grade i'll let all these wonderful pieces of legislation i'm hearing about figure out how to innocent us to do within our purview. i would be run out of any room back home or any group of mayors if i didn't say we do believe that the zoning issues, the process and permitting issues are always going to be best handled at the local level. that does not mean, though, that you cannot attach, as i believe senator kennedy was implying, you cannot attach benefits to us doing things better in the right way. if you want to reward a city that reduces their permitting time and builds x housing units per year at a rate you set, i'm all for that. dallas will jump in that competition. we would gladly enter that competition to increase our housing starts to attract some sort of federal benefit. but it's not a new program we are looking for.

it's a change in the narrative. senator britt: i have a question for mr. jellenic, thank you. i have ran out of time. chair scott: senator warner. sen. warner: thank you for holderring this year. holding this hearing. aim going to quickly go through -- i'm going to quickly go through some of the tools, mr. mayor, almost all are bipartisan, new market tax credit extension with senator daines. neighborhood home investment act, the fill-in opportunity from the dallas, almost every community. we have to make sure if there is an aging properties they can be filled in at a cost-effective basis. historic tax credit in terms of rural applications. the traditional traction credit as well. c.f.i. tax credit.

ail come to that with miss r ms. wilsonis in a moment. i'll advise with my republican colleagues having we put together last year the lift act which is focused on first generation, first-time home buyers end up being 2/3 people of color. the subsidy comes to form, in addition to some of the other tools, if you qualify you would get -- you would pay a 30-year rate but a 20-year mortgage. you double the amount of equity you get in the first 10 years. i think the ranking member's already mentioned this. something i have been doing on cdfi's to get a secondary market. mr. glaeser, start with you. on lift i was going to mr. jelenic. could you speak to that idea how we deal with the ability for first time home buyers to build up equity with something

innovative? mr. jelenic: i am a little familiar with the lift act and i understand as you explained t in the consumer would get the benefit of a 30-year rate but essentially have the ability to build equity as if it was a 20-year mortgage. we would like to dig into this with you. it's products like this that get us excited. whether it's a product like this or something else delivered without increasing risk or ability to repay, which this doesn't do either of those, and gets people on that path of achieving the american people dreem and getting equity -- dream and getting exwith wit in their homes. we would be in support of that. sen. warner: gi to mr. glaeser, lots of people talked about the need to localities to improve their zoning tools. i've got two notional ideas. i do think potentially the cbdg grants having a carrot to maybe increase those if you would

limit your zoning requirements. one is commercial to residential. there is not a community in america that doesn't have an aging strip mall of one form or another. i don't think they'll ever come back. you have infrastructure built in. how we could use that tool. to really innocent those conversions. number one. number two, other folks may have raised this. how we can work with religious institutions. lots of churches, mosques, who have lots of available land. i've got in northern virginia a church has been trying for five years to put a multifamily unit and it would not disrupt the neighborhood. five years is way too long. they have not moved a shovel of dirt. can you talk about beyond cdbg what other tools we might use to give incentives to localities that change zoning restrictions. dr. glaeser: these are great questions. let me join with you in a

profound desire to see those single use zoning rules imposed throughout america in the 1920's, see them repealed back. they have to be repealed at the local level not federal level. but this is a tremendous curse. it's a curse for our cities trying to reinvent themselves post covid, especially those that have huge individual office markets. a curse for suburban areas that had strip malls once the cutting edge of retail and are not there. i think thinking about this is great. again i would probably push on something which is sort of, again, using some sort of carrots and sticks with federal funding to just nudge more production. but a specific discussion of how great it would be to allow different uses of land. that would be very helpful. sen. warner: to my colleagues on both sides of the aisle, there is -- need to do much more. so many religious institutions, with that contribution you take out the cost of the underlying land. there is a win-win here.

i think an interesting partnership. as well as in the last couple seconds, cdfi's visit on this in the past, you important-ish we need to give these additional benefits. we need more -- under the last administration we got $12 million in tier one and grants. can you talk for a few seconds. ms. willis: cdfi's are important. they offer flexible loans to build and preserve affordable housing. for rental homes, for health care chloroquine ings, grocery stores, things the communities need -- health care, grocery stores, things the community needs. they expand economic opportunity and development in distressed communities. they offer interest rates that are flexible. that are better -- that have a better reach for underserved communities as well. through the capital magnet fund,

cdfi's where they financed over 83,000 affordable homes. it's extremely important the role that cdfi's play. chair scott: senator ma raino. sen. ma raino: i'll ask some questions. i think it's important to say that if government action and good intentions lowered housing costs, and you looked over the last period of time, housing should be free given how many initiatives government has put in place to lower housing costs, not ironically. dr. glaeser, you live in massachusetts. i lived in massachusetts for 12 years. it's more rare to find a republican at harvard than to find a republican writ large in massachusetts. and the ranking member talked about how housing costs for that school teach, i'm familiar with that. i ran a large group of car dealerships that cold cars to schoolteachers. they kept living further and further away to the point where

a lot of people lived in new hampshire. that worked in massachusetts. it's interesting because if you are looking how do you solve housing problems, i would headline it do the opposite of massachusetts. which is massive government intervention in public markets -- private markets that should be allowed to work. my question for you, dr. glaeser, is this. in 2019 if you made $59,000 a year, you could afford a home as defined by your income was less than 30% of your mortgage payment. today that number's almost approaching $110,000 just five years. what happened? dr. glaeser: thank you for your question. thank you for your care on this topic. i want to respond to your comment on massachusetts land use regulations. which is, i have long thought it's deeply ironic that dead state texas does better for

affordable housing than massachusetts. all of which is very well-intentioned and consequences deeply harmful for ordinary people trying to buy homes. the change in affordability reflects two things. reflects both the price of housing and the mortgage rates. and i'm not a banking or a macroeconomist. i i study housing markets and cities and other places. aim not going to run down the litany of mistakes that my macroeconomist colleagues think got us to the point where mortgage rates are currently what they are. that's not my business. that is a big part. the other part that i am happy to talk about is the fact that housing is so much more expensive than it should be. this is an issue in which it used to be about coastal areas. and now it is increasingly in sunbelt cities where the inner ring areas have made it harder and harder to build. you used to see patterns in places like atlanta, we built much more in the pricier parts

of atlanta in the 19p 0's, 1980's, now we don't. now we build in the lower density areas away from things. i think no longer just a massachusetts issue. that's what scares me. the places that were the escape valves for affordable housing in the u.s. the houstons, the atlantas, miamis they are not turning into escape valves. that scares me. i think having some national discussion, having nom even if it is largely symbolic, is important to recognize we are going in the wrong direction as a country if we want to be a place where outsiders can come and forge a brighter future. sen. moreno: if you see an 80% increase in five years to afford a home, what happened during that four or five-year period? could it be we let 10 million illegals come into this country? would that incredible courage in demand with no correlating supply increase, could that have

something to do with it? do those 10 million something people having to be housed raise the price of housing generally? dr. glaeser: again i'm not an expert on immigration policy. sen. moreno: you know supply and demand 101. dr. glaeser: i'm going to repeat what i said in my original testimony which is we know things are a demand problem. when you see quantities and prices up. you know things are a supply problem when you see prices up and quantities down. what we have seen in the u.s. over the last 1r5 years are prices way up and willed building quantities are way down. it is crucial the one fact to take away from this this is a supply problem. it is fundamentally not about housing demand. sen. moreno: 10 million people that need to be housed is a problem. mr. jelenic, this is also the banking and housing committee. what are some of the things that you think could be done from an innovation perspective to help alleviate this problem? mr. jelenic: senator, thank you

for the question. it's sort of the -- it's the very discussion we have had on housing applying to the mortgage side. as long as we are careful with the innovations we implement anti-ways we test there, there are a -- and the ways we test them, there are a lot of ways we can use technology and data to reduce the cost. i can go into this if you like. certainly. whether it's -- some was in my testimony. these are examples. i guess i'll give about 10 seconds on the core of our business. we exclusively work with independent mortgage brokers that are small town businesses across all 50 states. the reason why we are dedicated to serving the wholesale channel and mortgage brokers only, they are generally the lowest cost way for a consumer to get a loan. they are embedded in their communities. whether it's rural, urban, they know the market better than anyone else. our whole existis -- existence is being a low-cost provider. you can see that in our property

and the margin. everything is about technology, process, and efficiency. some of the things we have available to us we have incredible data and an laityics tools in the appraising realm -- anda littics tools in the appraise -- analytic tools in the appraisal round. it's a small number relative to the housing supply, the numbers awpped. coy say the same thing for the mortgage insurance in the title say. space. they are -- title space. they are necessary. if you look at premiums collected and when they need to be paid out, there are opportunities to provide alternatives where you don't have any -- don't increase the systemic risk, don't increase learned risk or consumer risk, you are leveraging mod rn day technology and in some cases a.i. to reduce costs out of what is a complicated and oven legacy oriented process. sen. moreno: thank you,

mr. chairman. >> senator van hollen. sen. van hollen: thank you. and thank all of you for your t start on the supply issue. i have been listening in on c-span and clearly constrained supply drives up costs. you are an economist, dr. glaeser. the reason we are worried about constraint supply is because with the demand not being met it drives up costs. that's the fundamental question. there is another side to the cost factor. that is the cost of materials. i just want to read to everybody a letter that we all received from the national association of home builders. very recently. i'm quoting, while home building is inherently domestic, builders rely on components produced abroad with canada and mexico representing nearly 25% of building materials imports. imposing additional tariffs on these imports will lead to higher material costs which will

ultimately be passed on to home buyers in the form of increased housing prices, unquote. that's a pretty simple statement of supply and demand, is it not? dr. glaeser: yes. sen. van hollen: when we hear the president talking about beautiful tariffs, i think the american people need to understand what he's talking about if applied in a broad-based way mean higher housing costs, isn't that right? dr. glaeser: it is hard to see how imposing higher costs on materials come interesting outside will lower costs for housing, that's certainly true, senator. sen. van hollen: let me give you the estimate from the chief economist over at the national association of whole builders. he estimates the tariffs once fully phased in will add anywhere from $7,500, to $10,000 to the claus of building the average american -- to the cost of building the average american home. do you have any reason to dispute that? dr. glaeser: it is true he

represents antry group. industry groups are known to talk about policies in the way that gets the policy objectives they want. i have no particular evidence on the home building technology to dispute that number. sen. van hollen: ms. wilsonis, i want to turn o the other part of the -- ms. wilsonis, i want to turn to the other part of the ovation. helping families that can't afford the home. some additional means to be able to do that. in your testimony you talk about, quote, the immediate threat facing h.u.d. as a result of the actions being taken by elon musk and the doge group. i must say that i find it kind of sickening that the richest man in the world who just a few years ago sold like seven mansions is trying to deny working people access to programs that at least to some extent increase affordability. could you talk about the damage that would be done if the threatened cuts go forward?

ms. willis: absolutely, senator. also, too, just thinking about you are talking about the richest man in the world. i want to talk about the h.u.d. programs and who they are meant for. when we are talking about e.l.i., extremely low-income households, we did a study. we have a studdie that's called out of reach -- study that's called out of reach. $32.11 is what a person needs to make in order to afford a modest two bedroom unit. $26, 74 is what a person would need to afford a modest one bedroom units. as we know the federal wage is $7.25. so many people will have to work 2.8 jobs or more to afford affordable housing. h.u.d. provides affordable housing and stability to people who need it across this country.

at least one out of four people who need it. again that means three out of four don't receive it. when we are talking about the cuts to h.u.d., we are talking about in one program, the program that oversees the field offices, we are talking about a 50% cut, a 50% cut in staff to the program that oversees public housing and indian affairs. talking about an 84% cut to the office that oversees cdbg, block grants, the housing trust fund, you name it. we are talking about an 84% cut there. and a 76% cut to the program that does the research. so that figures out the market rates and the rents that are to be paid to landlords. how can these programs function if you are cutting these programs?

and again it's a significant cut throughout h.u.d. the field offices, they see people on the frontline coming to them to access h.u.d. programs. and i don't see how you can function as an organization with those kinds of significant cuts. sen. van hollen: thank you. in closing, don't have any more questions. i want to thank you for supporting in your t-bipartisan legislation -- in your testimony the bipartisan legislation with senator young entitle the feament stability and vouchers act. a proven approach to helping lift families out of the cycle of poverty. thank you. chair scott: senator tillis. sen. tillis: several years ago in the state legislature, i had one of the towns in my district. i told this in the finance hearing before. we spent 45 minutes in that meeting talking about what i could do to help them with afford and housing. we had a great meeting. the last 15 minutes of the

meeting they were trying to pitch me on passing -- we have what they call local bills where it provides authority for county and city governments to do things that are unique to them. they wanted me to file a local bill that empewered -- empowered them to mandate sprinkler systems in single family dwellings. i said guys, we just spent 45 minutes talking about what we could do for more affordable housing, you just proposed something as a mandate that would add to the cost of a home about 10% or 15%. how do those two work together? they don't. north carolina i think is tied -- close to idaho or tied with idaho for having the most number of residential construction permits authorized per 1,000 people at 9.12 a year. and yet over the next five years we are going to have about 800,000 units shortfall, almost

evenly divided between rental and for sale units. one of the things i didn't accomplish when i was speaker of the house i hope we get to accomplish up here is that the scarce dollars for affordable housing resources only go to the state and local governments that are regulating efficiently and responsibly. why would i, dr. glaeser, i have a question for you, what is wrong with this idea that says we index states and local governments based on regulatory execution, cost to permit and time to permit. and at some point when they reach an unacceptable level, they are no longer eligible for affordable housing resources coming from the federal government because in a world of scarce resources, we should deploy it to jurisdiction that is fall below that unacceptable level. what's wrong with a construct like that? dr. glaeser: as i argued in my testimony i believe strongly

that the best path forward is to use some form of discretionary federal spending to nudge states and localities to permit more housing. and some for of conditionality of this form seems helpful. i think you have to make a decision what forms of spending you want. in my own thinking i'm certainly open on housing. if you wanted to move a state say california, towards changing their rules, i think you find transportation spending would be more effective than housing spending. because housing spending is going to appeal much less to the typical legislator in california which is lens hens the need for different committees to talk to one another. some degree of leaning against the highly restricted areas -- sen. tillis: i have people wanting me to provide relief that overtax their population, they want the federal government to subsidize that. to discount their overtaxation. think about the same juries drks

dictions, the salt states. the reason i have a personal problem with that if north carolina had not lowered its tax burden when i was speaker, we would be a salt state. similarly, why on earth should we not hold state and local governments accountable for the increasing cost of affordable housing units in their districts? leave it up to them. if you want to regulate until the cows come home. all states, if you want to keep raise -- salt states, you want to keep raising taxes, awesome. don't expects federal dollars throw good money after bavmentd what's wrong with that concept? dr. glaeser: for 25 years i have been obsessioned for -- obsessed for local regulation for americans to buy a home. i am thrilled this committee is looking at federal policies -- it has to be based on the production of units. don't make it based on the rules they can money with the rules -- monkey with the rules.

sen. tillis: i like the idea of tillis asking willis. ms. wilsonis, why shouldn't reducing -- ms. wilsonis, why shouldn't -- does your coalition focused on unnecessary regulatory requirements as a -- to the extent you can measure them in areas you are focused on as a key priority for your organization to make sure we can produce more affordable housing? could you do that today? how do you react to what i just asked mr. glaeser, i'm done before that, mr. chair. ms. willis: thank you, senator. tillis-willis sounds like a great television show. i will say that we focus on -- we do see the affordable housing crisis has being two-pronged. on the supply side we don't have enough affordable housing we talked about today. but it's also on the demand side. incomes -- there is a gap between incomes and rent. so i do see that the federal

government can assist in making sure that making investments in rental assistance to people who need it. because, again, only one out of four receive it. but we should have universal rental -- sen. tillis: fair point. i'm telling you it would be helpful for people advocating for housing to understand that this is an impediment. this is a driver behind some of the assistance that people need because we are needlessly increasing the cost, create ago great fap. people that grew up in the same trailer park i did need help. get it. figure out how to make that trailer, trailer park, those apartments more affordable. thank you, mr. chair. chair scott: senator cortez masto. sen. cortez masto: thank you for holding this hearing. this is such an issue as can you only imagine including in nevada. and i thank you to the panelists

for your candor and not taking the bait sometimes when some of my colleagues try to bait you. the truth matters. most importantly how do we address housing matters and being honest about it. let me talk a little bit about nevada because one of the things i do know it is a supply issue. there is no doubt about it. we have to address the supply. we also have to address the affordability. i have working families that can't afford homes. it's not just the supply. it's how do we ensure that no matter your station in life you can afford that home. the homes that are being built in my state are a little bit more costly, honestly, we have federal land. 80% of the federal land is only by federal government. first step in building housing is getting that land from the federal government. that's the first cost that is associated with with building those homes. now we have to figure out how we level the playing field so we can lower those costs. it is about building.

it's also the financing that goes into that building to ensure that we can keep some of those costs low enough for those families, working families to be able to afford these homes. one of those programs we have at the federal level that i still believe in, i think we need to continue to utilize it, and modernize it, is the home program. let me -- ms. wilsonis -- ms. wilsonis, i have a -- ms. wilsonis -- ms. willis, i have a bill. in 1994, has not been re-authorized or anything, what i have done is taken it, updated it to make sure it works better for our families and our communities. and introduced it yesterday. ms. wilsonis -- ms. wilson list -- ms. willis, can i ask you, like

in my state where we have to address one key piece that have cost was getting that federal land first. ms. willis: thank you for the question. thank you for your leadership in introducing the legislation to improve the home program. home as you know, it's another financing structure to allow deals to pencil out. so it is a critical source of gap financing. it is important. we would certainly love to continue working with you to improve home so that it better supports mature community housing development organizations so they can better serve extreme low-income households. sen. cortez masto: dr. glaeser, i had a question for you on manufactured homes. you answered it. i thank you for your candor there. let me ask you this, you also talked a little bit about federal land. can you expand on your view use federal land for housing is not

by itself going to meet the affordable housing needs of this country. i'm curious if you would expand on the thought of a little more. dr. glaeser: thank you for your question. thank you for your interest in manufactured homes as well. i'm also interested in the idea of putting prezoning federal land for manufactured housing. we can combine the two as well. i think all federal land should be taken on a case by case basis. my comment i don't think will solve america's affordable housing problem is because it's not in places where -- oven not in the placings where we have an affordability crisis. there are many parts of america which descront substantial amounts of federal land nearby. it's impossible to imagine greater boston what federal land we would use toe solve that problem. there are marts of america where there is federal land. i believe strongly we should use serious analysis and think about whether or not more of that federal land should be allocated towards housing. if we do that, figure out a way to get as much housing on it as possible.

things like large-scale manufactured housing is one way. sen. cortez masto: thank you. i couldn't agree more. that's why a piece of legislation i introduced in another committee is lands management in clark county focus on how we get more of that federal land for our use for economic development. but also for housing. that is unique to the western states. most of my colleagues don't have to come to the legislature to pass legislation to get land for housing. we do. i appreciate your comments around there as well. ms. willis, thank you. one final thing, the federal home loan banks. there is a role for them to play. not a new role, one in the original charter they are required to participate in which is this idea that they are supposed -- they are supposed to and obligate the to think about how they invest in housing and economic development in our communities. ms. willis, do you think federal home loan banks could do more to

support housing? ms. willis: sure, yes. i would say that -- we need every use of every resource available to address the affordable housing crisis and homelessness crisis. i do applaud you for looking at commonsense ways to do that. and to increase those resources. we would certainly love to continue working with you and your team and staff to ensure that those new resources better serve extremely low-income households. chair scott: thank you, as well. senator banks. sen. barntion: i want to -- sen. banks: i want to thank you for hearing. i learned so much. i appreciate everyone who has been here today. the price of a typical home in indiana has gone up 60% in five years. i think, mr. chairman, what we are talking about today how much home ownership is linked to the american dream, this is fundamental to why we are here.

and what we are here to work toward. that's why i think this hearing is so important. dr. glaeser, you studied and written papers on the differences between building a home and buying an existing home. i wonder if you can unpack some of your findings. what does it mean for the future of the american dream when it -- as that gap between the two changes, what did it used to be, what is it now? maybe i'm not making enough sense. there is a divide there that's changing rapidly. i wonder what that means. dr. glaeser: wonderful question. it gives me a chance to talk about the basic evidence how we know how powerful zoning s the basic logic of economics is that if you have a relative competitive market, the price of what it costs to buy something should be close to what it costs to make something. otherwise more competitors will come in. and construction is a really competitive industry. increasingly about 20 years ago, a body of evidence that i was involved with, documented a

growing gap between how much it costs to buy and how much it costs to build. in dense environments you can look how much it costs to buy an apartment in new york city versus build, the beauty of that is the building is physical. always add extra stories. it was twice as much. 20 years ago. it's more today. i heard some language about add zoning adding 25%. this is like land use controls doubling the effective price. in lower density environments it's harder because you have to price the land and you don't actually oven know that. one of the tricks that we have is that we can compare how much an acre is worth if it extends an existing lot, versus if it sits under existing lot. the answer in many environments it's 10 times more valuable if it sits under a house than existing law. with those tools we can say that in fact the gap between the land cost plus the housing cost and how much it costs to buy has gone way, way up.

that's wait we know -- one of my favorite ways knowing land use regulations are really playing an outsize role in this. i think of indiana being a place where it is relatively easy to build. but it is clear that places where i once thought it was easy to build are becoming harder. as it becomes harder, that wedge between buying costs and building costs has just expanded. >> what's healthy? what do we want that gap to look like? dr. glaeser: 20%. >> a year or type. there was a healthy gap between building and buying? dr. glaeser. for most of the people we started working it is clip at this cles expensive to buy than build in most america. as been mentioned before houses deprieshate. the new houses bought are at a premium. billing a house is more expensive than buying. typically that was negative. that would be fantastic where it

costs more to build than buy the typical home. >> we understand why it's zoning, regulations, those issues driving it. one other question t a lot of the affordable housing programs for the federal government are focused on building apartments. apartments are good. a lot of hoosiers live in apartments. there are a lot of first time home buyers that want to buy a single family house. rather than live in an apartment. can you talk about how we can reform some programs to give first time home buyers an opportunity using federal support to achieve that american dream rather than living in an apartment? dr. glaeser: one thing i would think about is think about how particularly h.u.d. treats manufactured housing. i think there are some very exciting things that are going on in manufactured housing. exsighsing things going on -- exciting things going on in indiana. the city of chicago is looking to source its homes in public

housing from an indiana producer. i think making sure h.u.d. doesn't scrit against manufactured housing would be great in terms of making ordinary homes affordable to first time home buyers. in general leaning against local regular lailingses. it's important to remember that even if the homes are being built are too expensive for first time home buyers, because they alleviate the pressure on used housing they are still good for affordability for first. >> senator warnock. >> thank you very much, mr. chairman, we have a housing availability and affordability crisis in this country and i'm concerned about young americans and their ability to pay rent. i grew up in public housing and been reflecting these days that i was able to buy my first home pretty young.

but young folks coming along now, it's tough. you are a harvard economics professor, are you concerned about young americans and home ownership? >> i certainly am. and you know, i had a paper five years ago that looks at consequences of housing regulations and transfer of housing wealth from the young to the old and compared 2013 and 1983. 1983 there were young people that housing wealth. but that's gone. the 75 pluses, they are enormously wealthy. if you bought a home in los angeles in 1973, you are spectacular but trying to buy a

home in los angeles in 2025, not so. >> i'm you canning about the college students that i know. so massive transfers and a lack of the inability particularly pass wealth from one generation to the other is moving in the wrong direction which has implications for all of us. this is a big problem that requires real solutions and we saw largest increase in rental costs and first time home buyers reached an all-time low. georgia has the lowest home ownership in the southeast. what are the consequences of high rental costs and upward

mobility and the broader economy? >> on an individual level when people with low incomes can't afford housing, they make impossible tradeoffs. tradeoffs between paying rent or buying groceries or education or investing in their children's education. but more broadly researchers have found housing constraints have lowered g.d.p. growth and 36% over the study period. and in any given year g.d.p. was 7% lower. >> i'll let you continue. not bad for the folks buying home but bad for all of us? >> exactly.

zoning reform is huge. and need to address the market failures. so because the market cannot by itself go without federal investment. >> what about people who are first time buyers, what is the biggest down fall? >> down payment costs. >> i had the down payment equity act that are bills that address the affordability issue because when the private market fails to address our housing crisis, the government must help with smart investments. so we get a healthy balance. let me be clear, government can

get in the way, especially local government. dr. gleyser. you are beginning to talk about that a little while ago. >> i have been trying to make this, the problem has gotten worse and localities saying no. adding homes and saying no to the dream. >> thank you so much. this restrictive zoning, racism is still a persistent problem and it's a problem even in blue cities under democratic leadership. and that's why i agree with the chairman and my republican friends that we have to solve our housing crisis and will require regulatory right

sizing. we'll never make a dent in our housing shortage and without federal investments like my two bills and my bill with the ranking member to construct lower housing. this is a serious issue and we need bipartisan solutions. thank you so much. >> i look forward to working together on solving these issues. >> senator mccormick. >> thank you to a great panel. in addition to being part of the american dream home ownership. when i'm back in pennsylvania i hear about this problem, housing prices are up 11% over the last year and major metro areas philadelphia and pittsburgh rank near the bottom nationally in

new home construction. there is a mismatch between supply and demand. you are from my wife's hometown. could you give us a perspective as a big city mayor on the challenges you particularly have faced with housing construction and stories you may have heard from other mayors? >> i think -- surrounded by several vibrant used to be bedroom communities but relatively large successful suburbs and the metro area that we formed together we call the d.f.w. is to be the fastest

growing. eight million people and very dynamic region with a lot job growth and a lot of economic opportunity, the buckle in the sun belt and the sun belt is growing population-wise and economically. there is no shortage of folks who want to do business in our neck of the woods and have choices to make where they do that building and as the mayor of dallas is to make dallas a more competitive place for them to do that. one of the most common things i hear from folks who are in that line of work about not dallas and someplace else is the

permitting process and how cumbersome it can be to navigate that process. that is why i have been focused on that while i have been mayor. but your question highlights that i want to emphasize and i alluded to it before, it has to be on your mind if you are going to address it for your constituents is that this is a national competition for the same people and the problem just moves around the country. it just moves around. we benefit from -- for being more affordable than california, but oklahoma city benefits more than dallas. we have to deal with it in a national manner and for sure and that is to increase the amount

of homes being built and the big barrier is how long. >> that's what we are hearing across the board. i want to talk about veterans' homelessness and you have had success with that in dallas. comment on the collaboration between v.a. and h.u.d. and the national trend is that your's seeing. >> homelessness and there are documented studies in terms of housing first with making sure that homeless veterans are housed. there is a study -- the success rate is over 50%. >> getting better? >> certainly getting better, on any given night over 770,000 people who are living on the

streets every night. but in terms of veterans, the trend is that it is being solved and getting better but we want to see more. >> doctor, i want your brain here for a second, current course for this committee to think about with a change in the overall posture of policy makers, what do you think housing prices are going to do in the next five years? >> i'm going to dodge that one, senator, just to be honest, i don't want to be on the record for the next five. i see no reason why we aren't going to correct course. whatever housing cycle. it feels it is america that more and more of this country is

closed off. when i was a kid a book about how stable associates get captured by insiders and make it impossible to find a fortune. it feels more and more like america now and it is important for your committee that america of opportunity continues. >> senator blunt rochester. >> thank you for this really thoughtful thoughtful hearing on housing. thank you to the panel for all of your testimony. it is abundantly clear and hear every senator we recognize we have a housing crisis in this country and i hope this provides hope to you that you recognize

we are in this together. buying a home has never been more expensive. for a new home, it could cost half a million dollars to be able to afford a house. we know that this is a challenge. and i think about building generational wealth. i think work force housing. we have doctors and nurses and firefighters. i think about the root causes of those who are unhoused and whether it's our veterans, seniors or young people, this is affecting everybody in this country. doctor, as the nation's most preeminent scholar on housing, land use and the economy, could you talk to us a little bit in

your research you mentioned restrictive land use policies has restricted supply and demand. and cutting red tape in the house and now the senate. could you talk about the overall impact of a lack of housing supply and whether you are a small business or family should care. >> thank you for your leadership and this is a national problem. as i mentioned in my testimony, our nation's core is -- we move to places where it is possible to build rather than where people necessarily want to live. our overall g.d.p. is lower. less ability -- foreign policy, all of that weakens us as a

country. we are a country has less mobility because we particularly regulate those communities that are really good of kids of poor parents into middle income. upward mobility, but you see this in the date and. some parts of america that are great turning low income kids into middle income adults. we don't because of local land use regulations. this is an issue that impacts all of us. redistribution across and makes us less dynamic than we could

be. >> what we heard i think all of us consider local land use and zoning reforms are critical to unlocking critical supply and i introduced the housing supply and innovation frameworks act in the house and reduce the barriers and they would re-imagine zoning laws and cut red tape. but we need the local level support. they are the ones that are making these land use decisions. i want to jump to the issue of breaking down barriers and cutting red tape and shared equity housing models. we need innovation. we need innovation as well. when i think about shared equity models i think of land trusts and creating affordable homes

and delivering wealth. to the panel, do you think shared equity mod ilsz play a role in addressing the housing crisis and achieve home ownership or other innovative solutions you might have. >> absolutely. i think shared ownership -- when i think about those i think about community land trusts which is a good resource and example of shared equity models. and so certainly would encourage you and your colleagues to expand opportunities as well as shared equity because it does allow opportunities for people to move into home ownership and to continue. >> i am preparing legislation in this area so i will share that

with the committee but we will ask some more questions and thank you all for your testimony and your work in ensuring that americans can live a prosperous life and my parents lived in public housing for a while and to be able to go into that first home that my parents bought is nothing like it. i yield back. >> thank you for your patience and i appreciate your willingness to stick around. many of us have shared experiences and lead to shared. >> thank you, chair. and thank you to the panelists for being here today. we all recognize that home ownership is the key feature of

building wealth and when i think about this subject, my mother who spent 50 years as a reaccept nist and my father was a car salesman and married at 21 and 22 and within five years they could afford to buy a home. that is no longer the expectation for my own daughter. i was a county executive and focused on home ownership and working to leverage public sector dollars and preserve about 5,000 units in a three year period. i wonder if you could speak to the need to better allocate private capital into projects that promote home construction and ownership? >> i also have a 19-year-old daughter. and i agree with your sentiment

how utterly implausible to buy a home would be for her. when housing works, private capital went to provide housing. you see this in the data in 1950, 1960's. and prices were higher and that building process helped prices come down. that ceased, the places that are expenses don't build a lot. it is determine i have of where it is going and not the sort of fundamental need for opportunity in one place. these local regulations are shaping our country and shaping where private capital goes and

getting new businesses and all being decided at a i love individual choice but none of these local town councils is saying what would be best in america and why it is so valuable that your committee is taking up this topic and need a national voice on this. >> just another question, you made a statement and you said that america's housing crisis was a deep self-inflicted wound and i am concerned because we heard a lot about tariffs and produce some data about how it will impact costs of home building, which i think can further exacerbate. but what impacts you believe president trump's proposed

tariffs will have on imported terse and how it affects h.u.d. building. >> for 250 tariffs impose costs on consumers. and i'm not going to weigh in but i don't understand. i'm not going to second this that. and going to see that overtime. >> final question for our mayor here, i know in fiscal year 2024 the city of baltimore as well as your city of dallas received over $30 million in total federal support from h.u.d. and includes funding through the home program and i'm co-sponsor of this legislation that would re-authorize it and strengthen it but talk about the

communities if the program is reduced or eliminated? >> similar question was asked earlier and i'll give you a similar answer. the specific impact, i don't have the data to tell you what it has been but as far as the whole array of federal programs related to housing aimed at the lower income even before i became the mayor, i do see there is a value to these programs. i do see that they create some increase year over year in the available housing stock aimed at the end of that income spectrum. for me to participate in today's discussion and what i will tell you that amount even in a good

year and what we need to be looking at is substantially increasing the amount of housing available the city of dallas across all income levels and creating enough housing where it relieves pressure for everyone from the young and the folks who are living in a far-flung suburb but work in dallas. they have to live far away, i feel like force ourselves to get out of this box.

and how much more money and people we can serve with those and having whole sale movement along the supply curve and the amount of housing we are producing and i don't think there is a source in the private sector to do it. if i thought government could do it, i would say it but i don't think they can. >> senator gallego. >> arizona has seen growth and brings unique. fifth largest city in the u.s., 7, 400 vouchers than philadelphia. housing voucher to allocate. [indiscernible] can you talk about unique challenges and solutions that you have seen actually work?

>> thank you for the housing voucher fairness act. because right now, one out of four eligible households for housing assistance gets any help. the others have to fend for themselves and that is 3 out of four and congress should be working that housing assistance is available to all eligible households. >> one of the things we discovered, reason why there is a disparity the housing voucher allocation is based off the 2000. if you are fast growing city, you are actually disproportionately penalized for having good policies versus the

older cities. [indiscernible] >> just an update in the most recent sense us -- census would be more more accurate. and 76% in the office in h.u.d. is being threatened to cut backs, the staff there. and it is important to have that data to understand the housing issue and how we can correct it. >> one of the things talking arizona is unique that we have 22 recognized tribes and largest

tribal community. lots of land. but a housing challenge. closing down some of our tribal offices makes it difficult especially when we are trying to apply housing grants for. i'm going to introduce that myself and senator kelly without in opposition to the closing of these offices. we actually have a housing crisis. i have a question and something i have noticed that many californians are moving to arizona and instead of downsizing their homes, they are selling 1.5 million in california and buying nearly that amount. why are they doing that.

>> thank you for that question. i could see the appeal of arizona should be obvious to anyone. and certainly reason they are selling their house at 1.2 million and instead of retired couple, a man and woman, partner whatever it is, instead of getting a nice house, they are buying a house of equal value. >> we believe people respond to prices. [indiscernible] >> the reason also is because if that family sells that house and they don't buy a house close to

similar value they are going to pay capital gains. a retired couple which they shouldn't pay that and figure out a way to give them a capital gains tax cut. then they would buy a smaller place and then keep that money for their own retirement. instead of what they are doing is buying an equivalent house. how are we incentivizing well to do retirees into buying houses that they don't need to buy. with that, i apologize. i yield back my time. >> sounds like us to work together and increase the amount of money. look forward to that.

any closing remarks. what a wonderful hearing dealing with housing challenges that we are facing across the country and we are all better educated from the experts and traveled from across the country to be with us and thank you for doing so. it was an i will umh naturing and there will be legislation and on the president's desk this year to have more housing out there. housing affordability are important to me. senators who wish to smith questions for the hearing record, they are due one week. witnesses you have 45 days to submit your answers. thank you so much. this committee is adjourned.

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[applause] >> i'm grateful to be here for